Electro Energy Reports 2006 Financial Results
Electro Energy Inc. announced results for the year ended December 31, 2006. Consolidated total net revenue for 2006 was $4,666,737, a 21% increase compared with $3,861,650 for 2005. The increase in revenue was a result of the resumption of sales to EaglePicher after its emergence from bankruptcy in August, 2006 and increased battery shipments to the U.S. military.
The consolidated gross profit for 2006 was $105,991 or 2.3% of total net revenue compared with a consolidated gross loss of $753,667 or 19.5% in 2005. The improvement to gross profit was mainly a result of the revenue mix shift to products with higher gross profit and improved manufacturing overhead cost absorption resulting from higher product volume.
The net loss for the year ended December 31, 2006 was $5,961,713 or $0.28 per share compared with $3,290,680 or $0.23 per share in 2005. The net loss increased due to higher selling, general and administrative ("SG&A"), research and development ("R&D") and interest expense.
SG&A increased $1,988,837, primarily as a result of $1,287,848 of start-up operation costs at the newly acquired Gainesville, Florida manufacturing facility and an increase of $780,642 in non-cash, stock-based compensation expense as required by the latest accounting standards. R&D expenses increased $284,863 due to product development for use of the company’s bipolar batteries for hybrid electric vehicles (HEV) and plug-in hybrid vehicles (PHEV), and for bipolar lithium ion batteries for advanced military applications. Interest expense for 2006 increased by $1,071,731, as a result of the issuance of 8.5% senior secured convertible notes in April, 2006 in connection with the acquisition of the Florida facility.
The company ended the year with $6.3 million cash and cash equivalents, $2.5 million of which is restricted for payment of debt obligations over the next five quarters, compared to $0.6 million at the end of fiscal 2005.